The Fed’s top official says he broke the central bank’s trading rules

New York

Federal Reserve Bank of Atlanta President Raphael Bostic said Friday that he inadvertently broke the central bank’s trading rules.

The new documents highlighted several violations. Bostic, who has led the Atlanta Fed for five years, made personal trades during shutdowns, when officials are prohibited from conducting financial transactions. The disclosures also show that Bostic previously filed incomplete information and held more than $50,000 in U.S. Treasury funds last year, exceeding the permitted limit.

Bostic is the latest among senior officials to be scrutinized for trading activity outside the Fed’s strict rules. The ongoing scandal has already led to multiple resignations.

The revelations come at a crucial time for the Federal Reserve’s credibility. The central bank declared inflation to be “transient” last year and has had to step up interest rate hikes this year to cool the economy.

On Friday, Bostic said the errors were due to a misinterpretation of central bank rules. He said he wanted to correct his mistakes “as soon as I became aware that my financial reporting did not meet the expressed or implied expectations necessary to maintain public confidence.”

The Fed president added that he did not make any trades based on inside knowledge.

“I recognize that it is my responsibility to understand and fulfill all the duties of this office,” Bostic said. “I want to be clear: I did not knowingly authorize or complete any financial transaction that is not public information or with the intent to conceal or circumvent the obligations of transparent and responsible reporting.”

Two Fed chairmen resigned last year after it was revealed that they had traded individual stocks in 2020 as the Fed intervened in markets amid the pandemic-induced recession.

Powell responded by imposing widespread restrictions on personal investments in senior officials. In implementing these restrictions Bostic’s violations were exposed.

The Fed said Friday that Chairman Jerome Powell had asked its inspector general to conduct a review of Bostic’s transactions and that the central bank would take action based on the results of the investigation.